What should I do with my IRA as a stay at home mom?

The funds are yours. If you do not need the money and have a goal to use it at retirement, you should invest the money accordingly. If you are more than 5 years away to retirement, you should build a portfolio with mostly stock exposure. This way you give yourself a chance to grow the money as much as possible. If the markets are good to us, you should be able to double your money every 10 years or so. If you're not sure on how to do that, find a fiduciary financial advisor for advice.

This is a great question and one you have a couple options with which to decide.

Your main two options would be to cash out the IRA (but I am not sure why you would do that) or maintain it and let the account grow.

In your question we are missing information like how old are you, are you currently married, when you are looking to retire, and how the funds are currently invested.

Cashing in the IRA completely would incur a tax liability. Depending on your age the tax on the withdrawal could be simply ordinary income tax (if you are over 59 1/2) or ordinary income tax plus a 10% penalty (if you are under 59 1/2). This may or may not be a great idea and I would suggest you speak with your CPA about whether this option would even make sense for you based upon your individual facts and ircumstances.

You can also maintain the IRA and continue to let the account grow. I would suggest, if you do not watch or understand how the investments in your IRA work, consulting with a fiduciary advisor to see if you should make changes to how your assets are invested. Although you are not actively contributing you could invest the funds the same or differently over time so they are in line with yur goals and objectives without cashing in the IRA.

As a stay at home mom (which you say you quit your job, but this is one of the hardest jobs out there), you may still be able to contribute to an IRA based upon your spouses income if you are married. This may be something else to speak with your advisory team about as you may be able to add funds even though you are not receiving employment income.

I am surprised ... and disappointed that you have to ask! Your financial advisor should have been talking with you all along, making certain that you understood your options, rights and possible responsibilities (e.g. Required Minimum Distributions) that you have with your IRA. So let's start with the basics: some things you should know about this account.

First, the funds are yours to do with as you please. You can even liquidate the funds, if you want. However, keep in mind that 1) you will pay income taxes on anything you withdraw and 2) if you are too young (under age 59 1/2) you'll also pay a hefty ten-percent "fine." Assuming you are still under that age, what should you do?

Second, this is where I believe many financial advisors fail their clients. Your IRA should be properly invested. By this, I mean you should have the right balance of assets, stocks and bonds to provide you with the expected returns as balanced with the amount of risk you are willing to take on. These should also have low fees so that more of your money will work on your behalf. Chances are, you are holding some mutual funds from which you paid a commission and could possibly be paying an ongoing fee (called a 12b-1 fee). These don't help you. At all.

Third, you can transfer your account to someone who will actually work with you, communicate with you, and help you decide what you can and should do with your account! In other words: you can find an advisor who will actually try to help you with this and other important decisions.

You can continue to invest your IRA as you see fit - stocks, bonds, mutual funds, exchange traded funds (ETFs), money market, CDs etc.. If you have a spouse that works, you could continue to make contributions as a spousal IRA. With regard to taking distributions, any distributions from a regular IRA (non-Roth) will be taxed as ordinary income to you, and if you are under 59 1/2, then 10% early withdraw penalties apply as well.

So be careful taking a lump-sum distribution because the entire amount will be taxable in the same year, so depending upon the size of your IRA, it could be a big tax hit all at once. Alternatively, you could spread it out over at least a few years to lessen the blow and possibly the tax rate. But if you don't need the money, let it continue to grow. At 70 1/2, you will be forced to take Minimum Required Distributions (MRDs) over your life expectancy.

I hope I answered all of your questions succinctly, but if not reach out to me & I would be happy to clarify.

The funds inside your IRA should continue to grow if they are properly invested, regardless of whether you are adding additional money every year.

Your options include cashing out the IRA, converting it to a ROTH IRA and just letting it be. If you have other IRAs, they can all be consolidated so that is another option.

If you cash out your IRA and you aren't 59 1/2 then there would be a 10% penalty on the amount you pull out. Plus regular income taxes on the same amount. Please carefully consider this option as it may come with unintended consequences in terms of penalties and taxes.

You can convert the IRA to a ROTH IRA. A ROTH IRA is a type of IRA in which you pay the taxes up front (now) and the invested funds grow tax free. These are a good tool for those who are in a low tax bracket but expect to be in a higher tax bracket later. The thinking is you pay your taxes now when they are low instead of later when they are high. Another benefit of the ROTH IRA is that the money you have already paid taxes on invested, can be pulled out at any time without penalty. That can't be done in a regular IRA. Another benefit is that you aren't mandated to begin slowly pulling the money out of a ROTH when you are 70 1/2 as you would in a regular IRA.

You can also just leave the account as is if it is well invested in a diversified portfolio and watch it grow. You could then begin withdrawing the funds when you are 59 1/2.

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